In this guide7 sections
In August 2025, Starbucks said it would give all salaried employees in North America, including store managers, a flat 2% raise instead of manager-decided merit raises. Your employer generally decides how much of a raise to give, but California law still controls the rest. If you are paid a salary in California, a raise doesn’t settle whether you are truly exempt from overtime, and your pay must be fair across sex, race and ethnicity.
Key takeaways
- A salary alone doesn’t make you exempt. In 2026, exempt employees generally must earn at least $70,304 a year and spend more than half their time on exempt duties.
- California’s Equal Pay Act requires equal pay for substantially similar work regardless of sex, race or ethnicity (Labor Code §1197.5).
- You have the right to discuss your pay with coworkers, and to ask for the pay scale for your own job (Labor Code §§1197.5, 432.3).
- When workers have a union, the employer generally must bargain before changing wages.
What Starbucks announced
News reports on August 18 and 19, 2025 said Starbucks would give a uniform 2% base-pay raise to all non-hourly employees in North America, including corporate staff and salaried store managers. Raises had previously been decided at managers’ discretion. Bonuses were not part of the change, and hourly baristas were not included. A company spokesperson said Starbucks needed to “carefully manage all our other costs” while investing in store changes.
Separately, Starbucks was bargaining with unionized baristas. In April 2025, union delegates rejected a company contract proposal that included annual raises of at least 2%, saying it lacked hours protections, better health benefits and an immediate raise.
Salaried store managers: are you really exempt?
Many retail and restaurant managers are paid a salary and told they don’t get overtime. In California, the executive exemption generally requires all of the following:
- Salary: at least twice the state minimum wage for full-time work, which is $70,304 a year in 2026.
- Primary duties: more than half your working time spent on exempt work, such as managing staff, hiring and directing work.
- Judgment: customarily exercising discretion and independent judgment.
The title on your badge doesn’t decide it. If you spend most of your shift making drinks, running the register, stocking and cleaning, you may be misclassified, even with a salary. Misclassified employees may recover unpaid overtime, interest and attorney’s fees (Labor Code §1194). The Labor Commissioner’s overtime FAQ explains the basic rules.
Example (hypothetical): Erin manages a coffee shop for a $72,000 salary. With two baristas short, she spends about 40 of her 50 weekly hours on the bar and register. Her salary clears the threshold, but her duties may not meet the test, so she could be owed overtime. See our guide to the exempt duties test and estimate amounts with our wage and hour calculator.
Raises and equal pay
A flat percentage raise applies the same increase to everyone, but it also carries forward any existing pay gaps. Under California’s Equal Pay Act, an employer may not pay you less than employees of another sex, race or ethnicity for substantially similar work unless the whole difference is explained by seniority, merit, production-based pay, or a job-related factor such as education or experience. Prior salary can’t justify a gap.
You may discuss your own pay and ask coworkers about theirs, and your employer cannot retaliate for it. Employers must also give you the pay scale for your current position on request, and employers with 15 or more employees must post pay scales in job ads. More in our pay transparency guide and our page on equal pay.
When workers have a union
According to the National Labor Relations Board, an employer generally may not change wages, hours or working conditions for union-represented employees before bargaining to agreement or impasse, with limited exceptions. Workers without a union are also protected when they act together on pay, such as signing a group request for raises.
Frequently asked questions
Does my employer have to give me a raise?
Generally no, unless a contract, union agreement or written policy promises one. Your pay must still meet minimum wage, exempt salary and equal pay rules.
Can I be fired for asking coworkers what they make?
Generally no. Retaliating against you for discussing or asking about wages can violate the Equal Pay Act (Labor Code §1197.5), and adverse action within 90 days creates a presumption of retaliation.
I’m a salaried manager. Can I get overtime?
Possibly. If you spend most of your time on non-exempt tasks, or your salary is below $70,304 in 2026, you may be owed overtime.
How far back can I recover unequal pay?
Under the 2026 version of the Equal Pay Act, a claim generally must be filed within three years, and you may recover for up to six years of violations.
Talk to a California employment lawyer
Employees First Labor Law represents workers exclusively. We offer free virtual consultations if you think you are misclassified or paid less than coworkers doing similar work. Contact us or call (310) 853-3461.
This article is general information about California law as of 2026, not legal advice for your situation. Reading it does not create an attorney-client relationship.
